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CEE FX: ING Remain Bullish on CEE Region Ahead of NBH, CNB

CEE FX
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  • Overall, ING remain bullish on the CEE region. They note that the most attractive at the moment seems to be HUF, which in the rates market repriced up significantly, while EUR rates fell slightly. Thus, the interest rate differential moved to the highest level in weeks, adding support to FX. Moreover, EUR/USD is still testing higher levels favouring CEE currencies in general.
  • ING think EUR/HUF should move into the 392-393 range by Tuesday's NBH meeting. On the other hand, the meeting should be a reason for a reversal and ING’s medium-term view is more negative on HUF, with the upper side of our trading range for the rest of the year at 392-400.
  • ING note CNB market pricing is still on the very dovish side, but given the core story, it makes no sense to go against the received market. On the other hand, the CNB meeting should be reasonably hawkish and CZK should benefit the most from it. Therefore, ING still find the CZK attractive for the days ahead, when we should test 25.00 EUR/CZK.
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  • Overall, ING remain bullish on the CEE region. They note that the most attractive at the moment seems to be HUF, which in the rates market repriced up significantly, while EUR rates fell slightly. Thus, the interest rate differential moved to the highest level in weeks, adding support to FX. Moreover, EUR/USD is still testing higher levels favouring CEE currencies in general.
  • ING think EUR/HUF should move into the 392-393 range by Tuesday's NBH meeting. On the other hand, the meeting should be a reason for a reversal and ING’s medium-term view is more negative on HUF, with the upper side of our trading range for the rest of the year at 392-400.
  • ING note CNB market pricing is still on the very dovish side, but given the core story, it makes no sense to go against the received market. On the other hand, the CNB meeting should be reasonably hawkish and CZK should benefit the most from it. Therefore, ING still find the CZK attractive for the days ahead, when we should test 25.00 EUR/CZK.